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Acquisition Fever Spreads: Business Objects, Informatica Go Shopping

The BI acquisition-go-around continued apace last week, as both Informatica and Business Objects acquired smaller vendors

• By Stephen Swoyer
• December 6, 2006

The business intelligence (BI) acquisition-go-around continued apace last week, as both Informatica Corp. and Business Objects SA acquired smaller vendors. Informatica's acquisition gives it a means to get at unstructured (or semi-structured) data, which analysts say comprises as much as 80 percent of enterprise information. Business Objects, on the other hand, signaled a more-than-passing interest in the software-as-a-service (SaaS) arena by acquiring Nsite Software Inc., a SaaS start-up and salesforce.com partner.

Informatica Plugs a Gap

Unstructured data's the thing, as it turns out, by means of which the information management haves could soon be separated from the information management have-nots. And it shouldn't surprise anyone that standalone data integration specialist Informatica very much wants to shore up its position with the information management haves. That was Informatica's thinking last week when it acquired longtime partner ItemField, a provider of data transformation technology that facilitates access to unstructured and semi-structured data.

In late 2004, Informatica began deemphasizing its non-ETL-related activities—such as its fledgling analytics business (which it abandoned altogether), as well as its aspirations in the end-user reporting space—in order to focus on the bread-and-butter data integration segment.

Since then, the data integration market has gotten a lot more interesting, thanks to IBM Corp.'s acquisition of Ascential Software Corp., Microsoft Corp.'s release of a significantly revamped SQL Server 2005 ETL facility, and Oracle Corp.'s Warehouse Builder 10g release.

Informatica hasn't rested on its laurels, either. It acquired data quality specialist Similarity Systems Inc. earlier this year, and this summer, it announced plans to repackage its PowerCenter ETL tool in the form of a software-as-a-service (SaaS) deliverable.

In the broader information integration space, Informatica has maintained a long-standing OEM agreement with Composite Software Inc; it resells the latter company's enterprise information integration (EII) technology, which it embeds in PowerCenter (as the PowerCenter Unstructured Data Option).

Starting last year, officials say, Informatica also began embedding Itemfield's ContentMaster technology in PowerCenter, too. Itemfield has more than 100 customers, including heavyweights such as American Airlines, Natexis Bank, and health information services specialist McKesson. More to the point, Informatica officials claim, Itemfield is a ubiquitous OEM partner.

"If you look at the list of partners they've already announced, you would get a sense of the unique architecture they've got. SAP is using it as part of NetWeaver. IBM has announced an add-on to their WebSphere Business Integration. And Oracle and [Informatica] have used it more in terms of data integration," said Informatica CEO Sohaib Abbasi during a conference call last week with analysts.

Itemfield will continue to be a ubiquitous OEM-er, too, at least if Informatica sticks to the playbook it announced last week. Abbasi and other officials said Informatica plans to resell both the Itemfield-based PowerCenter add-on and Itemfield's embeddable and standalone ContentMaster products to existing OEM and enterprise customers. This in turn could provide an opportunity for Informatica to push its ETL, data quality, and other tools, says James Kobielus, a principal analyst for data management with consultancy Current Analysis.

"Informatica will have the opportunity to cross-sell Itemfield enterprise customers on its broad range of [data integration] and [data quality] wares," he points out. Itemfield claims as many as 150 customers, although 50 of those are joint Informatica/Itemfield accounts. Even so, Kobielus notes, that's still a big opportunity for Informatica.

And that's just the beginning, he avers. "Informatica will also add Itemfield's other high-profile ContentMaster OEM partners—including SAP, Oracle, IBM, and Microsoft—to its partner ecosystem. Doing so will expand Informatica's ability to license and cross-sell its various [data integration] and [data quality] products to existing and future licensees of Itemfield technology."

In this last respect, Kobielus observes, Itemfield is a player in the enterprise application integration, enterprise service bus, and middleware arenas, too—in addition to the vanilla data integration segment.

On the technology front, Kobielus seems to like what he sees. "Itemfield provides embeddable ContentMaster transformation templates to OEM partners, and also provides a standalone offering that incorporates a high-performance data-transformation engine," he explains. "The technology works in batch and real-time applications. It may be deployed into both intra- and inter-enterprise environments. And it supports visual, code-free, automatically adaptable developer access to unstructured and semi-structured data."

He also commented on Informatica's success with another (larger and higher-profile) acquisition—that of Similarity Systems.

"Having recently acquired and successfully integrated Similarity Systems' DQ offerings, Informatica will have a solid precedent for rapid and thorough integration of Itemfield technology into its portfolio," Kobielus concludes. "Informatica will apply the same approach to re-brand, assimilate, integrate, and transition Itemfield's organization, products, and partner ecosystem that it applied successfully to Similarity Systems."

Business Objects Gets Even SaaS-ier

Forget (if you can) sassy jazz legend Sarah Vaughan: Business Objects wants to be the first and last name in SaaS—software-as-a-service, that is.

The BI giant last week acquired Nsite Software Inc., a SaaS start-up with approximately 27,000 subscribers. The acquisition will help augment Business Objects' own SaaS practice, CrystalReports.com, in part, officials say, by expanding the company's ability to deliver on-demand BI services.

Business Objects launched Crystalreports.com in April, promising turnkey reporting capabilities and a Web-based delivery model that lets customers share Crystal Reports with employees, partners, and customers. Since going live, CrystalReports.com has picked up more than 7,000 subscribers, officials say.

"As a specialist in software as a service, Nsite has developed a large customer base and considerable expertise in developing a platform for using and building on-demand applications," said Steven Lucas, vice president of strategic markets at Business Objects, in a statement. "SaaS is changing the software market and the acquisition of Nsite is a big step forward for Business Objects in opening up this important new market to business intelligence."

Nsite's application platform—an AJaX-based environment that lets users quickly build, customize, and deploy SaaS solutions—currently integrates with salesforce.com's SaaS CRM offering. It includes a wizard that enables users to build point-and-click, Web services-based integrations to other applications. That's just what Business Objects has in mind: officials disclosed plans to use Nsite to build customizable on-demand BI applications (which in turn consume data from multiple sources, including ERP and CRM systems) and offer them—as on-demand services—to subscribers.